Telecommunications firm KCOM Group has agreed to be bought by UK’s largest pension scheme for £504m (€583m).

The £64.5bn (€74.58bn) Universities Superannuation Scheme (USS) said it will pay 97 pence for each share of the London-listed telecoms provider. The amount being paid per share represents a 33.8% to the share’s last closing price.

The acquisition which is being made by Humber Bidco, a subsidiary of USS, will be implemented by means of a scheme of arrangement and will be subject to approval by KCOM shareholders. 

KCOM said its board “unanimously recommends” that shareholders accept the offer.

KCOM is focussed on three markets and provides voice and internet-based services to 140,000 consumers and businesses in Hull and East Yorkshire.

Patrick De Smedt, interim non-executive chairman of KCOM, said the board believes that the offer for KCOM provides, on completion, both meaningful, “guaranteed cash returns for shareholders” as well as a strong, supportive partner in KCOM’s endeavours to take the business forward to new successes.

“The board believes that the offer of 97p per share represents a compelling opportunity for shareholders to realise an attractive cash value in respect of their shares and recognises the quality of KCOM’s businesses and the strength of their future prospects.

“For all these reasons, the board unanimously recommends that shareholders accept the offer.”

Mike Powell, head of the private markets group at USS Investment Management, said: “We believe that KCOM is a high-quality business that is well-placed to grow and thrive under private ownership and that is why we have made this compelling offer to shareholders at an attractive premium.

“With the right capital support and assistance, we believe that KCOM’s management will be able to enhance the quality of its offering, delivering benefits for customers as well as sustainable, long-term returns.”